Papers in Evolutionary Economic Geography

November 14, 2014

# 14.23 Cultural diversity and entrepreneurship in England and Wales

Filed under: 2014 — Tags: , , , — mattehartog @ 7:15 pm

Andres Rodríguez-Pose and Daniel Hardy

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British regions are becoming increasingly culturally diverse, with migration as the main driver. Does this diversity benefit local economies? This research examines the impact of cultural diversity on the entrepreneurial performance of UK regions. We focus on two largely overlooked factors, the measurement of diversity, and the skills composition of diverse populations. First, more that demonstrating the importance of cultural diversity for entrepreneurship, we show that the type of cultural diversity measured is a decisive factor. Second, the skill composition of diverse populations is also key. Diversity amongst the ranks of the highly skilled exerts the strongest impact upon start-up intensities. The empirical investigation employs spatial regression techniques and carriers out several robustness checks, including instrumental variables specifications, to corroborate our findings.

# 14.22 Innovation in creative cities: Evidence from British small firms

Filed under: 2014 — Tags: , , , , — mattehartog @ 7:13 pm

Neil Lee and Andrés Rodríguez-Pose

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Creative cities are seen as important sites for the generation of new ideas, products and processes. Yet, beyond case studies of a few high-profile cities, there is little empirical evidence on the link between local creative industries concentration and innovation. This paper addresses this gap with an analysis of around 1,300 UK SMEs. The results suggest that firms in local economies with high shares of creative industries employment are significantly more likely to introduce entirely new products and processes than firms elsewhere, but not innovations which are simply new to the firm. This effect is not exclusive to creative industries firms and seems to be largely due to firms in medium sized, rather than large, cities. The results imply that creative cities may have functional specialisations in new content creation and so firms are more innovative in them.

October 27, 2014

# 14.21 Institutions and Diversification: Related versus Unrelated Diversification in a Varieties of Capitalism framework

Ron Boschma and Gianluca Capone

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The Varieties of Capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies, while liberal market economies show a higher probability to move in more unrelated industries: their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution. In particular, we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on ‘non-market’ coordination in the domains of labor relations, corporate governance relations, product market relations, and inter-firm relations.

October 14, 2014

# 14.20 “Don’t throw the baby out with the bath water”. Network failures and policy challenges for cluster long run dynamics

Filed under: 2014 — Tags: , , — mattehartog @ 2:56 pm

Jérôme Vicente

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Cluster policies have been recently called into question in the aftermath of several empirical evidences. Disentangling how market and network failures arguments play together in cluster policy design, we look for more robust micro foundations of network structuring in clusters. Our aim is to show that, in spite of this growing skepticism, new opportunities for cluster policy exist. They require moving their focus from the “connecting people” one best way that gets through the whole of cluster policy guidelines, to more surgical incentives for R&D collaborations, which favor suited structural properties of local knowledge networks along the life cycle of clusters.

October 6, 2014

# 14.19 The Technological Resilience of U.S. Cities

Pierre-Alexandre Balland, David Rigby & Ron Boschma

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We study the resilience of cities by analyzing their relative capacity to sustain the production of technological knowledge in the face of adverse events. Using patent applications in 366 Metropolitan Statistical Areas in the United States from 1975 to 2002, we analyze the vulnerability and response of cities to technological crises. We define episodes of technological crisis as periods of sustained negative growth in patenting activity. We find that the frequency, intensity and duration of technological crises vary considerably across American cities. We test whether the technological knowledge bases of cities, their network openness and institutional environment condition their resilience to technological crises. Econometric analysis suggests that cities with knowledge bases that are diverse, flexible and that have a high degree of relatedness to technologies in which they do not currently possess comparative advantage tend to avoid technological crises, have limited downturns in patent production and faster recovery.

September 23, 2014

# 14.18 Do spinoff dynamics or agglomeration externalities drive industry clustering? A reappraisal of Steven Klepper’s work

Ron Boschma

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Klepper’s theory of industry clustering based on organizational reproduction and inheritance through spinoffs challenged the Marshallian view on industry clustering. The paper provides an assessment of Klepper’s theoretical and empirical work on industry clustering. We explore how ‘new’ his spinoff theory on industry clustering was, and we investigate the impact of Klepper’s theory on the economic geography community. Klepper’s work has inspired especially very recent literature on regional branching that argues that new industries grow out of and recombine capabilities from local related industries. Finally, the paper discusses what questions on industry location are still left open or in need of more evidence in the context of Klepper’s theory.

September 5, 2014

# 14.17 Innovation and Regional Growth in Mexico: 2000-2010

Filed under: 2014 — Tags: , , , , — mattehartog @ 3:05 pm

Andrés Rodríguez-Pose and Edna MaríaVillarreal Peralta

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This paper looks at the factors driving regional growth in Mexico, paying special attention to the potentially growth-enhancing role of innovation and innovation policy. The analysis combines innovation variables with indicators linked to the formation of adequate social conditions for innovation (the social filter), and spillovers for 31 Mexican states and the Mexico City capital district (the Distrito Federal) during the period 2000-2010. The results indicate that regional economic growth across Mexican states stems from direct investment in R&D in areas with favorable social filters and which can benefit not only from knowledge spillovers, but also from being surrounded by rich neighbors with good social conditions. The results stress that, although Mexican innovation policy has been relatively well targeted in order to generate greater economic growth, its relatively modest size may have undermined the attainment of its main objectives.

July 13, 2014

# 14.16 Spinoff and Clustering: a return to the Marshallian district

Filed under: 2014 — mattehartog @ 9:52 am

Lucia Cusmano, Andrea Morrison and Enrico Pandolfo

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The origin and growth of industrial clusters have attracted the attention of scholars and policy makers since the early era of industrialisation. The seminal work by Alfred Marshall has represented the foundation for a rich strand of literature, whose late expansion and refinement were inspired by the experiences of localised development in emerging regions. This is the case of Italian industrial districts, which have emerged as a territorial model of industrial agglomeration, decentralised production and flexible specialisation. Recently, the traditional explananda of the emergence of clusters have been reconsidered. The evidence about the growth of clusters in areas that did not have obvious natural advantages, nor the first comers’ benefits of early agglomeration economies, has inspired a different conceptualisation, which draws consistently from the evolutionary perspective on industrial dynamics. Klepper (2001, 2010) shows that more successful firms have higher spin-off rates and their spin-offs tend to outperform competitors. Organizational reproduction and heredity are thus identified as the primary forces underlying clustering. The present paper investigates the emergence and evolution of an Italian industrial district, the Sassuolo tile district, one of the largest and most successful ceramic districts in the world, and a paradigmatic example of Italian Marshallian district. Overall, our findings confirm that organizational reproduction and heredity represent primary mechanisms of clustering. However, our results also show that spin-offs do not perform better than non-spin-offs. It appears that, in dense industrial environments and social networks, competitive advantages can also be acquired or built through other channels.

July 2, 2014

# 14.15 Regional and industrial mobility of workers leaving mature industries. A study of individuals who exit the Swedish shipbuilding industry 1970-2000

Filed under: 2014 — mattehartog @ 11:25 am

Rikard Eriksson, Martin Henning and Anne Otto

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This paper follows the industry employment histories of all individuals at some point affiliated with the dismantling Swedish shipbuilding industry 1970-2000. We analyse the situation of the individual workers leaving shipbuilding through investigating to what extent they were employed at all, tended to move to related sectors inside or outside the region, and whether such moves were beneficial for the individuals. By cross-using German and Swedish data, our findings indicate a notable impact of regional industrial structure on the movement and success of individuals, and that individuals moving from shipbuilding to related sectors benefit more from moving than others.

June 23, 2014

# 14.14 The role of external linkages and gatekeepers for the renewal and expansion of U.S. cities’ knowledge base, 1990-2004

Filed under: 2014 — Tags: , , — mattehartog @ 3:57 pm

Stefano Breschi and Camilla Lenzi

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This paper examines the role of external linkages and gatekeepers for the renewal and expansion of cities’ knowledge base, by presenting new evidence about co-invention networks in U.S. metropolitan areas based on European Patent Office (EPO) data for the period 1990-2004. We argue that the relative importance of direct external linkages and external relations mediated by gatekeepers varies according to specific local conditions. In particular, our findings suggest that external relations are on average a chief conduit to inject non-redundant knowledge at the local level and contribute to broadening and rejuvenating the local knowledge base. However, cities are quite heterogeneous in how they benefit from external relations. Whereas direct external connections outperform, on average, external links mediated by gatekeepers, the latter are especially important in cities with a localized and specialized knowledge base, as they enable the trans-coding and absorption at the local level of externally sourced knowledge.

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